Tanker Trade Flows Expected to Shift Again in 2025
The crude tanker trade flows are expected to change over 2025, as a result of Trump’s tariffs. In its latest weekly report, Poten & Partners said that “President Trump, who will take office on January 20 of this year has indicated that he will use tariffs as an economic and foreign policy tool. The aim is to reduce the U.S. trade deficit and reshape international trade relationship as part of his “America First” economic policy. Prior to taking office, Mr. Trump has already suggested that 25% tariffs could be imposed on imports from Canada and Mexico, both of which are important oil exporters to the United States. In 2024, the U.S. imported some 4.0 Mb/d of crude oil from Canada and another 465,000 b/d from Mexico. Canada also exports 560,000 b/d of refined product to the United States. While it is unknown at this point which countries will be targeted with tariffs, it is clear from the Canada/Mexico example that these measures (and the potential retaliatory tariffs) could be highly disruptive to global trade flows and create market inefficiencies and supply issues”.
Source: Poten & Partners
Meanwhile, according to Poten, “despite a ceasefire between Russia and Ukraine, the sanctions on Russia will remain in place. We expect that a ceasefire will be achieved in 2025 as President Trump will pressure both countries into a halt to the fighting. However, even if a ceasefire is achieved, serious peace talks will take a while to start and even longer to conclude. In the meantime, the UK, EU and the US will likely hold off on sanctions relief and maintain the freeze on Russian assets to keep the pressure on Mr. Putin. China and India will remain the key destinations for Russian oil and Aframaxes and Suezmaxes from the dark fleet will the vessels of choice to move it there”.
“China’s economy will show signs of recovery, but the tanker market will hardly notice it The Chinese economy went through a rough period in 2024. China’s GDP growth decelerated through 2024. The slowdown was driven by a downturn in the real estate sector, which also impacted consumer demand and private investment. GDP growth missed the government target of 5%. China’s crude oil imports in 2024 fell by an estimated 210,000 b/d, partly due to the economic headwinds, but also as a result of the increasing adoption of electric vehicles and the switching of trucking”, Poten said.
Another prediction of the shipbroker is that “Iranian exports will decline from their recent highs Iranian exports have staged a remarkable recovery in recent years (see Chart 1). During the previous Trump presidency, Iranian exports dropped to below 500,000 b/d. When Mr. Trump left office, Iranian exports started to recover, exceeding 1.5 Mb/d in the second half of 2024. China accounts for nearly 90% of Iran’s oil exports. We expect that a return of Mr. Trump to the White House will restart his “maximum pressure” campaign and lead to a significant reduction in exports. The Biden administration has already expanded the use of sanctions against individual ships in the so called “dark fleet”, and we expect that Mr. Trump will increase the use of these sanctions, which will reduce Iranian exports by 500,000 b/d by the end of 2025”.
Source: Poten & Partners
Poten concludes that “VLCCs will be the best performing crude tanker segment in 2025 Prior to the Russian invasion of Ukraine in 2022, the relative earnings of the various crude tanker segments were reasonably predictable. Over the 2016- 2021 time period, Suezmax earnings were 54% of VLCC earnings and Aframaxes slightly below that (46%). Since the Russian invasion and the resulting sanctions, Suezmaxes and (in particular) Aframaxes have outperformed VLCCs (in relative and sometimes absolute terms – see Chart 2). We expect this trend to reverse in 2025 due to limited VLCC deliveries and targeted sanctions that could benefit the large tanker segment more than others”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
